South African property market grows to R5.8tn

South African property sector is worth an estimated R5.8-trillion, the Property Sector Charter Council has revealed.

A study, compiled by provider of investment decision support tools firm MSCI on behalf of the council, provided a snapshot of the sector using figures from 2014/15.

 This report built on baseline research that estimated the value of the property sector at R4.9-trillion at the end of 2010.

“For a sector this big and this important it is crucial to have a hub of knowledge that consolidates information to support a common and consistent understanding of the sector,” said Property Sector Charter Council CEO Portia Tau-Sekati.

 She explained that, by regularly updating this research, the council created a measure of the effect of property cycles on the sector’s value, which could be significant.

 Of this, retail property had the highest value at R534-billion, followed by office properties at R357-billion and industrial properties at R281-billion.
 Hotels and other property accounted for R94-billion.

“A key finding of the latest research shows that formal residential property still accounts for nearly three-quarters of property owned in South Africa, and grew from an estimated R3-trillion at the end of 2010 to R3.9-trillion,” she said.

Tau-Sekati noted that, for the first time, it also considered informal residential property, although it had no value, which was quantified by the number of households provided by the Department of Human Settlements.

 The value of undeveloped urban land zoned for development remained unchanged at around R520-billion.

 The public sector contributed a total of R237-billion, of which around R102-billion was estimated to be in the hands of the Department of Public Works, R66-billion held by South Africa’s 19 largest State-owned enterprises and R69-billion by metros and selected local municipalities.

 Through this research, the Property Sector Charter Council continued to provide an updated scope of the property sector and create a more accurate overview of the South African economy.

The council’s South Africa Property Sector Economic Impact Report, estimated that the property sector had contributed about R191.4-billion to the country’s gross domestic product in 2012. 

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